As a result of an audit, a policy exception was identified that had been approved by the compliance officer. The auditor determined that the policy exception is a violation of a regulatory…

Question

Options

• AAdvise the compliance officer on how to appropriately respond to policy exceptions.
• BInclude the regulatory violation in the audit report and report it to the board of directors.
• CConsult with legal counsel to determine if the approval of the policy exception was acceptable.
• DInclude the regulatory violation in the audit report and recommend the compliance officer be

• A
  3% (1)
• B
  75% (30)
• C
  10% (4)
• D
  13% (5)

Explanation

The auditor should include the regulatory violation in the audit report and report it to the board of directors. This is because the auditor has the responsibility to report any findings of non- compliance or material weaknesses in the institution's internal controls, policies, and procedures. The auditor should also provide recommendations for corrective actions and follow-up on their implementation. The board of directors has the ultimate oversight and accountability for the institution's compliance program and should be informed of any significant issues or risks that may affect the institution's reputation, operations, or regulatory status.

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